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on Urban and Real Estate Economics |
| By: | Xuan Huang; Bruno Lanz |
| Abstract: | Using a dual-market sorting model of workers' location decisions, this paper studies the capitalization of air pollution in wages and property prices across Chinese cities. We exploit quasi-experimental variations in particulate matter (PM10) concentration induced by a policy subsidizing coal-based winter heating in northern China, specifying a regression discontinuity design based on cities' location relative to the policy boundary. We estimate that the elasticity of wages and house prices with respect to PM10 concentration is 0.41 and -0.71 respectively. Our results are robust to the use of an alternative source of exogenous variation in PM10 concentration (sandstorms), supporting the view that the local effect we measure provides policy-relevant information on the value of air quality improvements in China. |
| Keywords: | Hedonic model; Air pollution; Labor market; Housing prices; Local public goods. |
| JEL: | H41 J31 R31 Q53 |
| Date: | 2015–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_38&r=ure |
| By: | Yongheng Deng (National University of Singapore); Eric Girardin (National Centre for Scientific Research (CNRS)); Roselyne Joyeux (Macquarie University) |
| Abstract: | In a similar way to the stock market, the housing market in China has often been portrayed as highly speculative, giving rise to ¡°bubble¡± concerns. Over the last decade, residential prices increased every year on average by double digits in Beijing or Shanghai (Deng, Gyourko and Wu, 2012). However many observers and researchers argue that the fundamentals of the housing sector, both sector-specific and macroeconomic, may have been the driving force behind housing price volatility. While existing empirical work exclusively relies on downward-biased official housing prices, this paper uses original high-frequency unit level residential price series for Beijing and Shanghai to test alternative hypotheses about the drivers of house price growth. We propose a sequential research strategy including the construction of hedonic prices, explosive unit root tests (Phillips, Shi and Yu, 2014), the filtering of microstructure noise (Bollerslev et al. 2015) and a Mixed Data Sampling (MIDAS) methodology (Ghysels et al, 2007; Engle et al., 2013) which enables us to document that fundamentals can indeed account for movements in housing price volatility, as well as transaction volume in first©\tier cities such as Beijing and Shanghai. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:222015&r=ure |
| By: | Hyunseung Oh (Vanderbilt University); Chamna Yoon (Baruch College, CUNY) |
| Abstract: | Housing supply decisions consist of both an extensive margin (new housing starts) and an intensive margin (construction intensity of incomplete houses). While it is well known that housing starts have declined dramatically during the 2006--2009 housing bust, the intensive margin of residential investment has not been studied in the literature. In this paper, we document that construction intensity of incomplete houses has also fallen significantly during the bust. Using the Census micro data for construction lags of single-family houses across the US, we show that average construction lags for completed houses increased during the bust, and that this increase comes from long deferrals of several houses under construction, especially those that were unsold at the early stage of construction. Motivated by these new facts, we study a time-to-build model of residential construction where investment in each stage is irreversible. The model predicts that as the level of uncertainty increases, the ``wait-and-see'' channel becomes relatively more important for the intensive margin than for housing starts. Calibrated to match the house price dynamics during the recent recession, the model accounts for the majority of the observed increase in construction lags, which suggests that the real-options mechanism played an important role in the dynamics of residential investment during the recent bust. Several housing supply implications based on the model follow. |
| Keywords: | Housing, Real options, Investment, Time to build, Adjustment costs |
| JEL: | E1 E3 |
| Date: | 2016–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-16-00002&r=ure |
| By: | Aylin Topal (Middle East Technical University); Ozlem Celik (Middle East Technical University); Galip Yalman (Middle East Technical University) |
| Abstract: | This paper examines transformation of urban development in its repercussions in urban politics in Ankara since the 1920s with particular emphasis on the post-1980 period. It focuses on management mentality and finance mechanisms of housing policy in the city. This case study paper on Ankara shows that integration of urban land and housing with financial markets has been one of the central tendencies of neoliberal political economy particularly in the 2000s. The paper also notes that the case study epitomizes changing role of the state in creating urban rent and enabling and fortifying the link between the construction and banking sectors. |
| Keywords: | Ankara, housing, city planning, financialization, built environment, TOKI, Justice and Development Party. |
| JEL: | E44 R31 R21 G21 |
| Date: | 2015–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fes:wpaper:wpaper116&r=ure |
| By: | Jonathan Halket (University of Essex); Lars Nesheim (University College of London [London] (UCL)); Florian Oswald (Département d'économie) |
| Abstract: | Using the English Housing Survey, we estimate a supply side selection model of the allocation of properties to the owner-occupied and rental sectors. We find that location, structure and unobserved quality are important for understanding housing prices, rents and selection. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for estimates of rent-to-price ratios and can explain some puzzling correlations between rent-to-price ratios and homeownership rates. We interpret this as strong evidence in favor of contracting frictions in the rental market likely related to housing maintenance. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4dp533k0lq8dgrbgue1eid6mk1&r=ure |
| By: | Fuess, Roland; Zietz, Joachim |
| Abstract: | This study examines why monetary policy at the national level can have vastly different effects on appreciation rates of single family houses across metropolitan statistical areas (MSAs). The study employs Case/Shiller monthly house price index data for 19 MSAs from 1992:06 to 2014:12 and FHFA quarterly house price index data for 94 MSAs from 1992:3 to 2014:4. We model the importance of MSA-specific demand and supply characteristics through a set of interaction terms between these factors and monetary policy. The empirical analysis is cast in terms of a state-space approach with a stochastic trend component to absorb the impact of omitted variables. Robustness checks use panel data estimators with interaction terms. A lower federal funds rate is associated with home price run-ups in MSAs that are characterized by higher demand and tighter supply conditions. |
| Keywords: | House price inflation, demand and supply factors, federal funds rate, monetary policy, state-space models |
| JEL: | C21 C23 E50 R10 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2015:26&r=ure |
| By: | Vera Ivanova (National Research University Higher School of Economics) |
| Abstract: | Existing empirical work on the growth of Russian regions mostly covers a short time period and considers only regional-level data, while citylevel spatial data of the postreform era remain largely ignored. Using citylevel geocoded data covering 997 cities and towns from 1996 until 2013, I nd sigma- and betaconvergence across Russian cities in wages. City wages during the period under consideration display signicant and positive spatial autocorrelation. Spatial Durbin models of the Barro regression are estimated using Markov chain Monte Carlo methodology. Estimates of the spatial models for dierent weight matrices indicate that the city wage growth is signicantly aected by wage growth rates in neighboring cities, after conditioning on initial wages. |
| Keywords: | Russian cities, wages, convergence, spatial autocorrelation, spatial econometrics, Markov chain Monte Carlo. |
| JEL: | R12 O18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:120/ec/2015&r=ure |
| By: | Tomasz Brodzicki (University of Gdansk, Faculty of Economics, Gdańsk, Poland; Institute for Development, Sopot, Poland); Dorota Ciołek (Institute for Development, Sopot, Poland; University of Gdansk, Faculty of Economics, Department of Macroeconomics, Gdańsk, Poland) |
| Abstract: | The interaction between space (location) and the processes of accumulation (growth) is one of the most interesting and at the same time the most difficult areas of modern economic theory. The theoretical and empirical results to date are however largely unsatisfactory. In our analysis we proposed the way how to implement the space into the neoclassical Solow-Swan growth model. Territorial capital, as a specific carrier of the concept of territorial cohesion, is significantly different from the classical factors of production such as physical capital or labor input. It cannot be considered as a factor directly responsible for changes in the volume of production. However, territorial capital can have an impact on the productivity of basic factors of production such as capital and labor. Thus, when defining the function of production, we assume that territorial capital does not affect production directly, but it affects total factor productivity (TFP) indirectly, contributing to an increase in the production. In this paper we present our research findings on the contribution of various elements of territorial capital to regional growth in Poland. The study adopts a highly spatially disaggregated NUTS-4 level, i.e. counties, for which interactions and relationships of a spatial and territorial nature are particularly relevant. |
| Keywords: | regional development, TFP determinants, territorial capital, spatial econometrics |
| JEL: | O40 O47 R11 R12 C31 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1511&r=ure |
| By: | Zbigniew Mogiła (Wrocław Regional Development Agency) |
| Abstract: | Although elements of spatially-oriented analysis have been long used to augment production functions, relatively less attention has been paid so far to implementation of territory within the neoclassical utility theory. Taking into account territorial heterogeneity and the importance of geographical-temporal distance, we introduce the category of social territorial utility and incorporate it into the neoclassical optimization framework aiming to show how it might influence the production process. The main objective of this paper is to present how territorial utility might be formally incorporated in the mainstream economics within the framework of the model of territorial optimum. The expected social territorial utility is shaped by social consensus and is reflected by public policies. It poses a new endogenous force to disturb the spatial equilibrium which is defined – among others – by NEG models as an utility equalization across different locations. The theory of social territorial utility shows that such an equilibrium may only be apparent. There might be strong endogenously driven motivations to change the spatial status-quo even though NEG models suggest otherwise. Those motivations may vary considerably among regions and their source lies in market failures. With the model of territorial optimum we clearly show that one ought not to analyse an economic optimisation without taking into account diverse spatial preferences. Using the model of territorial optimum we define and include in the paradigm of mainstream economics the category of territorial cohesion, and organize its structure and indicate its position in the process of development. It is not our purpose to make any normative judgments in this paper. The model of territorial optimum presents a positive approach to territorial cohesion and its implications for regional development. The implications are likely to be very diverse due to differences in expected social territorial utility reflected in policies of regional authorities. We illustrate this by carrying out a scenario analysis for the Polish NUTS-2 region of Dolnośląskie. The main conclusion is that territorial cohesion should not be treated as an absolute category, i.e., the ideal and universal state of the territory. |
| Keywords: | Territorial cohesion, territorial utility, NEG, neoclassical paradigm, production function |
| JEL: | R11 R12 R58 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1517&r=ure |
| By: | Dungey, Mardi (Tasmanian School of Business and Economics); Tchatoka, Firmin Doko (Tasmanian School of Business and Economics); Wells, Graeme (Tasmanian School of Business and Economics); Yanotti, Maria Belen (School of Business and Exonomics, University of Tasmania) |
| Abstract: | This paper sheds new light on the role of borrower characteristics in mortgage product choice, and how these are impacted by regulatory capital requirements. Using rich loan-level data from the Australian market we analyse the way in which these risk effects impact the choice between adjustable rate mortgages and a range of complex mortgages which provide reduced initial payments.For the first time we find that all three of income, wealth and mobility risks play a role in product choice. We also investigate the role of regulatory capital requirements in an environment where banks hold mortgage risk on their balance sheet and find that the Basel capital discounts based on loan-to-valuation ratios divide otherwise similar borrowers between ARM and CM product choices. Year:2014 |
| Keywords: | Mortgage Choice Basel Banks |
| JEL: | G21 G18 |
| Date: | 2014–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:tas:wpaper:17831&r=ure |
| By: | Sergio Galletta (IdEP, Economia, Universita' Svizzera italiana, Switzerland) |
| Abstract: | In this paper, I empirically investigate the presence of spillover effects resulting from the strengthening of law enforcement against corruption and organized crime in local governments. Specifically, I take advantage of an Italian law that gives power to the central government to replace democratically elected municipal officials who are potentially connected with mafia with a commission of non-elected administrators. Fixed effects model estimates that focus on a sample of municipalities from three Italian regions (Campania, Calabria and Sicilia) for the period 1998 to 2013 show that the city council dismissal of a municipality fosters a reduction in public investments in neighboring municipalities. Additional empirical evidence suggests that this result could be explained by the presence of law enforcement spillovers potentially reducing misconducts in neighboring municipalities. |
| Keywords: | Horizontal interaction, Italy, Mafia, Corruption |
| JEL: | D73 E62 H72 K42 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpidep:1601&r=ure |
| By: | Philippe Martin (Département d'économie); Thierry Mayer (Département d'économie); Florian Mayneris (Institut de recherches économiques et sociales) |
| Abstract: | Clusters have already been extensively shown to favor firm-level economic performance (productivity, exports, innovation etc.). However, little is known about the capacity of firms in clusters to resist economic shocks. In this paper, we analyze whether firms that agglomerate in clusters and firms that have been selected to benefit from the « competitiveness cluster » industrial policy, implemented in France in 2005, have performed better on export markets during the recent economic turmoil. We show that, on average, both agglomeration and the cluster policy are associated with a higher survival probability of firms on export markets, and conditioning on survival, a higher growth rate of their exports. However, these effects are not stronger during the 2008-2009 crisis; if anything, the opposite is true. We then show that this weaker resilience of competitiveness cluster firms is probably due to the fact that firms in clusters are more dependent on the fate of the « leader », i.e. the largest exporter in the cluster. |
| Keywords: | Clusters; Competitiveness clusters; Exports; Crisis; Resilience |
| JEL: | F1 R10 R11 R12 R15 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/55oar0vhn18ot8rb6sekvvcvt7&r=ure |
| By: | Gabriel J. Felbermayr; Alexander Tarasov |
| Abstract: | The distribution of transport infrastructure across space is the outcome of deliberate government planning that reflects a desire to unlock the welfare gains from regional economic integration. Yet, despite being one of the oldest government activities, the economic forces shaping the endogenous emergence of infrastructure have not been rigorously studied. This paper provides a stylized analytical framework of open economies in which planners decide non-cooperatively on transport infrastructure investments across continuous space. Allowing for intra- and international trade, the resulting equilibrium investment schedule features underinvestment that turns out particularly severe in border regions and that is amplified by the presence of discrete border costs. In European data, the mechanism explains about a fifth of the border effect identified in a conventionally specified gravity regression. The framework sheds light on the welfare costs of second best investment schedules, on the effects of intercontinental trade or of privatized infrastructure provision. |
| Keywords: | Economic Geography;International Trade;Infrastructure Investment;Border Effect Puzzle |
| JEL: | F11 R42 R13 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2015-29&r=ure |
| By: | Wenli Li (Federal Reserve Bank of Philadelphia); Florian Oswald (University College of London [London] (UCL)) |
| Abstract: | The state of Nevada passed a legislature in 2009 that abolished deficiency judgments for purchase mortgage loans made after October 1, 2009 and collateralized by primary single family homes. In this paper, we study lenders’ mortgage lending and households’ mortgage application and subsequent default decisions in response to the law change. Using unique mortgage loan level application and performance data, we find strong evidence that lenders tightened their lending standards. In particular, lenders reduced approval rates and loan sizes for affected mortgages after the implementation of the law. Households, by contrast, did not delay their mortgage applications till after the law change. Furthermore, the law change does not appear to have affected borrowers’ default decisions. These results thus cast a cautionary note on the effectiveness of policy recommendations that intend to use deficiency laws to curb mortgage defaults. |
| Keywords: | Deficiency judgment; Default; Foreclosure; Approval; Interest rate; Nevada |
| JEL: | G21 K11 R20 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4udtt6bh25946auar877ii1c1e&r=ure |
| By: | Zwysen, Wouter; Longhi, Simonetta |
| Abstract: | We compare school-to-work transitions of British graduates belonging to ethnic minorities to those of white British. Six months after graduation ethnic minorities are substantially less likely to be employed than white British even after accounting for parental background, local area characteristics and detailed differences in qualifications. We show that university quality has a little impact while resources measured by parental background and the characteristics of the local area are more important for the labour market outcomes of ethnic minority graduates than for white British. Minorities lacking these resources earn less and are less likely to be employed compared to white British. |
| Date: | 2016–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2016-02&r=ure |
| By: | Mathieu Bunel; Elisabeth Tovar |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tep:teppwp:wp15-06&r=ure |
| By: | Philipp Marek; Benjamin Damm; Tong-Ya Su |
| Abstract: | This paper relates an individual’s social capital and the length of unemployment spells of the very same individual. For this purpose, we analyze several facets of an agent’s social activities as determinants of her social capital. Social activities lead to social interactions within organizational settings, which build up social capital at the group level. Via social interactions an exchange of knowledge emerges, including information on opportunities to get a job. An econometric duration model based on German data is applied to empirically research the relationship between social capital and the duration of unemployment. Our results show that an individual’s social capital positively affects an agent’s probability to take up employment in the next time period. This implies social capital shortens the length of an unemployment spell significantly. |
| Keywords: | Social Capital, Job Search, Duration Analysis |
| JEL: | Z13 J64 C41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp812&r=ure |
| By: | Hayashi, Fumiko (Federal Reserve Bank of Kansas City); Hanson, Josh (Federal Reserve Bank of Kansas City); Maniff, Jesse Leigh (Federal Reserve Bank of Kansas City) |
| Abstract: | This paper examines whether some of the unbanked consumers' choice of general purpose reloadable (GPR) prepaid cards over checking accounts and alternative financial service (AFS) products can be explained by the cost incurred by those consumers. We compare the three types of products by constructing consumer models based on the actual behavior of GPR prepaid cardholders and applying those models to the fee schedules of actual products offered in the market. Overdrafts are a major factor affecting the cost rankings. For consumers who regularly or occasionally overdraw their accounts, checking accounts are more costly than GPR cards or AFS products. In contrast, for consumers who do not need overdraft capability and short-term credit, GPR cards are more costly than checking accounts. The cost difference across the products clearly explains the former type of consumers' choice of financial products, while it does not explain the latter type of consumers' choice. |
| Keywords: | General purposes reloadable prepaid cards (GPR); Checking accounts; Alternative financial services (AFS); Overdraft; Unbanked |
| JEL: | D12 E42 G21 |
| Date: | 2015–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp15-15&r=ure |
| By: | BARTOVA, LUBICA; KONYOVA, VERONIKA |
| Abstract: | This paper discusses the Slovak regional economy structural changes, development and factors of regional economic specialisation and geographic concentration of sectors with a focus on agriculture from 1995 to 2012. Specialization and sector geographic concentration were quantified by Herfindahl and Entropy indices. At the national level we found steadily growing share of crop production at the expense of animal production. Regional concentration of both, crop and animal production and animal production specialisation has been increasing. Spatial clusters of similar specialised regions were detected for crop production. Linear panel models were used to estimate the effect of selected factors on regional crop and animal production specialisation. The agricultural policy instruments, including the CAP had significant effect on regional crop and animal production specialisation patterns. Provision of the complementary national direct payments (CNDP) and investment support had positive effect on regional crop production diversification. Density of regional road network, average annual temperature in the growing season, average annual rainfall in the growing season and provision of the LFA payments had positive effect on both regional crop and animal production diversification. |
| Keywords: | agriculture, specialization, cluster, regions, econometric model, panel, CAP, Slovakia, Agricultural and Food Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa150:228857&r=ure |
| By: | Melissa A. Clark; Philip M. Gleason; Christina Clark Tuttle; Marsha K. Silverberg |
| Abstract: | This article presents findings from a lottery-based study of the impacts of a broad set of 33 charter middle schools across 13 states on student achievement. |
| Keywords: | educational policy, program evaluation, methodology, econometric analysis, experimental design |
| JEL: | I |
| Date: | 2015–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:9c032c5141694169bd9b23012b11fcb3&r=ure |
| By: | Mariacristina Rossi; Eva Sierminska |
| Abstract: | In this paper we shall examine homeownership trends over the past 3 to 4 decades and discuss differences related to the homeownership gap for women and men, with a focus on most recent trends. We shall compare differences in the US to those in countries with different institutional structures and shall pay particular attention to differences across family types. Our estimation techniques will allow us to discuss the role of determinants from a gender perspective. We find that single women are better off than single men without children and a reverse trend exists in families with children. The general negative effect for women remains for younger cohorts in the face of risking homeownership. The latest crisis did not change the general long-running trend of the homeownership gap except for the US and France. The findings of this paper could provide an international perspective on differential homeownership rates among women and men, across countries and over time. Given that the value of one’s own home (home equity) is the largest financial reserve in a household’s wealth portfolio, it is important to have a better understanding of the differences resulting from gender and family types. |
| Keywords: | Housing, Wealth, Gender, homeownership, time trends |
| JEL: | D1 D3 R2 J1 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp815&r=ure |
| By: | Jorge Alcalde Unzu (Departamento de Economía-UPNA); Marc Vorsatz |
| Abstract: | Agents frequently have di fferent opinions on where to locate a public facility. While some agents consider the facility a good and prefer to have it nearby, others dislike it and would like to see it built far away from their own locations. To aggregate agents' preferences in these situations, we propose a new preference domain according to which each agent is allowed to have single-peaked or single-dipped preferences on the location of the facility, but in such a way that the peak or dip is situated in her own location. We characterize all strategy-proof rules in this general framework and show that they are also group strategy-proof. Finally, we characterize for some focal cases the rules that additionally satisfy Pareto efficiency. |
| Keywords: | Single-peaked preferences, single-dipped preferences, social choice rule, strategy-proofness, Pareto efficiency. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:nav:ecupna:1502&r=ure |
| By: | Joana Pais; José Pedro Pontes |
| Abstract: | In an economy where different agents undertake simultaneous and interdependent investments, this paper models the possibility that the outcome where some players invest and others do not invest is sustained in Nash equilibrium. It is well known that in models where all goods are financed through prices charged by the suppliers (“tolls” in the case of transport infrastructures), there are only two coordination equilibria: the “Big push” equilibrium, where every agent involved invests; and the “Poverty trap”, whenever none invests. We consider a two person simultaneous game, where the Government decides whether to build a highway and a firm producing a composite good decides whether to use it. Instead of resorting to tolls, the infrastructure is funded through an income tax that falls on wages. Having the Government supplying the highway and the firm not using it is a Nash equilibrium if the employment generated by the construction of the highway is intermediate and the rate of the wage income tax is high. The proliferation of unused transport infrastructures in Southern Europe seems to be related with low effects of public works upon the demand for labor and with demanddepressing “austerity” macroeconomic policies. |
| Keywords: | Balanced growth, Big Push, Spatial Concentration, Infrastructures Policy, noncooperative games. |
| JEL: | C72 R11 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp012016&r=ure |
| By: | Eric Wong (Hong Kong Monetary Authority); Kelvin Ho (Hong Kong Monetary Authority); Andrew Tsang (Hong Kong Monetary Authority) |
| Abstract: | This paper provides a non-technical summary of two recent empirical studies to shed light on key important issues regarding the implementation of loan-to-value (LTV) policy as a macroprudential tool, including its effectiveness, potential drawbacks and its transmission mechanism to improve financial stability. Empirical evidence suggests that LTV policy is effective in reducing systemic risk associated with boom-and-bust cycles in property markets. Although the LTV policy may be associated with higher liquidity constraints on homebuyers, we show that the mortgage insurance programme (MIP) can mitigate this drawback without undermining the effectiveness of LTV policy. Thus, MIPs play an important role in enhancing the net benefits of LTV policy. Concerning the transmission mechanism, empirical evidence suggests that the policy pass-through to property market activities may be weak. By contrast, there is clear evidence that tightening LTV cap would reduce household leverage and credit growth, and that lower leverage plays a major role in strengthening banks¡¯ resilience to property price shocks. This finding supports the view that household leverage would be an optimal target of LTV policy. |
| Keywords: | Banking, Hong Kong, Loan-To-Value, Macroprudential Policy |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:202015&r=ure |
| By: | Sergio Galletta (IdEP, Economia, Universita' Svizzera italiana, Switzerland); Agustin Redonda (Council on Economic Policies (CEP), Switzerland) |
| Abstract: | Profit taxation affects corporate investment decisions through several channels. This paper focuses on the impact of corporate income flat tax reforms on businesses' location choices. Since 1990, Swiss states (cantons) have been switching from a graduated to a flat tax rate scheme on profits. The paper assesses the effects of such a reform on the number of establishments by computing a difference-in-differences estimation. Our results show a negative impact on the number of firms in a given jurisdiction. Interestingly, the effect is considerably larger for riskier firms, suggesting the presence of an insurance effect from progressive taxation for risk-averse entrepreneurs. |
| Keywords: | Corporate taxes, Business location, Flat-tax, Tax reform, Progressive taxation |
| JEL: | H25 H32 H71 R3 |
| Date: | 2016–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpidep:1602&r=ure |
| By: | Ha Tu; Len Finocchio; Annie Doubleday; Kristie Liao |
| Abstract: | Since the last round of this regional study four years ago, the Bay Area's economy has continued to thrive, although there remain stark economic contrasts between the haves and have-nots. |
| Keywords: | San Francisco Bay Area, Insurance Coverage, Hospitals |
| JEL: | I |
| Date: | 2016–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:0a4cb73325a14b2ab18d3b7043578c2b&r=ure |
| By: | Feng, Siyi; Patton, Myles |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa150:212682&r=ure |
| By: | Robert Baumann (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross) |
| Abstract: | We use daily airplane arrival data from 2004 to 2015 from Hawaii’s Department of Business, Economic Development, and Tourism to determine the net change in arrivals around a variety of sporting events. We find only one event generates a positive and significant net impact on arrivals: the Honolulu Marathon, which generates roughly 3,900 additional arrivals. No other sporting events result in a measurable increase in tourist arrivals including, notably, the NFL’s Pro Bowl, which receives a large subsidy from the state’s tourism authority. |
| Keywords: | sports, stadiums, franchises, impact analysis, mega-event, tourism |
| JEL: | O18 R53 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1505&r=ure |
| By: | Xing Li; Tian Qiu; Guang Chen; Li-Xin Zhong; Xiong-Fei Jiang |
| Abstract: | Geography effect is investigated for the Chinese stock market, based on the daily data of individual stocks. Companies located around the stock markets are found to greatly contribute to the markets in the geographical sector. A geographical correlation is introduced to quantify the geography effect on the stock correlation, which is observed to approach steady as the company location moves to the northeast China. Stock distance effect is further studied, where companies are found to more likely set their headquarters close to each other. In the normal market environment, the stock correlation decays with the stock distance, but is independent of the stock distance in and after the financial crisis. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1601.01753&r=ure |
| By: | Lukas Mergele (Humboldt-Universität zu Berlin) |
| Abstract: | The decentralization of labor market institutions has been a popular tool for governments to enhance the efficiency and delivery of public services. However, there has been little research on how effective this move has been. This paper applies a difference-in-differences and a synthetic control approach to identify the causal effect on unemployment by the devolution of German employment offices in 2012. The reform was initiated because of a political stalemate between the federal government and the lower house about future unemployment policies. The resulting compromise included an experimental clause that allowed about ten percent of the German counties to become solely responsible for servicing long-term unemployed independent of the federal employment agency. Using a rich administrative dataset from the federal employment agency, I find that long-term unemployment increases during the regime change without prospects of medium-term reductions. Moreover, the transition process is associated with drastically reduced activities in active labor market policies. Contrary to the prediction by the classic Decentralization Theorem, the results do not support the hypothesis that local agencies are better able to deliver public services to long-term unemployed. |
| Keywords: | Decentralization, public employment offices, long-term unemployment |
| JEL: | H11 H75 I38 J48 |
| Date: | 2015–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:bdp:wpaper:2015020&r=ure |
| By: | Heike Joebges; Sebastian Dullien; Alejandro Márquez-Velázquez |
| Abstract: | The paper investigates in how far lax monetary policy (defined as deviations fromprescriptive monetary policy rules or past trends) and/or financial innovation can be seenas a cause for housing price bubbles in industrialized countries. From a theoreticalperspective, it is found that there are hardly any clearly formulated economic models whichassign a role to lax monetary policy in bubble formation, while there are a number ofmodels which assign a role to financial innovation or liberalization. In the empirical part,the paper first presents cross-country-time-series SUR regressions for a sample of 16industrialized countries. According to the results, there is no robust, significant role for therelevance of loose monetary policy, measured by deviations from the Taylor rule. Instead,deviations from the past trend of the real policy rate affect housing prices, but the size ofthe effect depends on the regulation and development of the financial sector. In a thirdstep, three case studies of the United States, Austria and the United Kingdom arepresented, representing countries which have experienced a) lax monetary policy and abubble b) lax monetary policy without a bubble and c) no deviation from the Taylor ruleand a bubble. The case studies hint that specific changes in regulations played a role forthe emergence or absence of bubbles, yet these regulations might not be appropriatelycovered by standard quantitative indicators for financial market (de-)regulation. |
| Keywords: | working paper, finance-and-trade, House prices, monetary policy, asset price bubbles, financial regulation |
| JEL: | E44 G18 G28 R30 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:mtf:wpaper:1501&r=ure |